What you need to know:
- Michael Joseph will be expected to oversee the implementation of a turn-around strategy to rescue the struggling carrier.
Former Safaricom chief executive Michael Joseph has said his priority at the troubled national carrier Kenya Airways will be to implement recommendations of an audit report that has exposed massive corruption at the cash-strapped airline.
Mr Joseph, who Wednesday took over the hot seat of Kenya Airways board chairman, will be expected to oversee the implementation of a turn-around strategy to rescue the struggling carrier, which reported a Sh26.2 billion loss for the financial year ended March 2016.
Kenya Airways is Thursday expected to announce half-year results for the period ended September 2016. The carrier has already said it expects to report a Sh7 billion reduction in after-tax loss to Sh5 billion and a growth in passenger numbers.
Mr Joseph replaced Mr Dennis Awori. He will be expected to see through the ongoing staff and process changes at the carrier, including restructuring KQ’s heavy debt load.
Mr Joseph, who is credited with growing Safaricom from a nondescript unit of a former State corporation to the region’s most profitable company, also wants to improve the morale of staff who have in recent days been up in arms.
The 70-year-old acknowledged that the airline has a lot of ground to cover, but insisted that with the right interventions, the publicly listed company can be rescued.
“The board is studying the Deloitte audit report in order to make factual corrections and establish the truth. After that, we shall take the appropriate action,” Mr Joseph said in an interview.
“Restoring KQ will not happen automatically. We have to look at areas like on-time performance, our debt, pricing and the destinations we fly to. KQ can be salvaged. It is a great airline with a new fleet.”
Major shareholders of the airline, the Treasury and KLM, have made the boardroom change keeping in line with a promise they made to KQ employees that heads will roll at the listed firm before the end of this month.
The Kenya Airline Pilots Association (Kalpa), which has about 400 KQ pilots, had threatened to go on strike last week if Mr Awori and the airline’s chief executive Mbuvi Ngunze do not resign.
They accused the duo of mismanaging the airline, causing it to report successive losses including the Sh26.2 billion loss that it reported for the financial year to March.
Transport secretary James Macharia, while announcing Mr Awori’s resignation and his successor, also reiterated that those found culpable of “theft and corruption” will be prosecuted where “the evidence is strong enough.”
“Mr Awori has been replaced by Mr Joseph who has extensive international experience and is best known as the founding CEO of Safaricom,” Mr Macharia said in a statement.
It is during Mr Joseph’s tenure as Safaricom CEO that the telco’s mobile phone-based money transfer service M-Pesa was launched, putting Kenya on the global map of financial services innovation.
He is currently in charge of mobile money at Vodafone, Safaricom’s biggest shareholder, and also consults for the World Bank on matters regarding financial inclusivity in developing countries.